Disneyland's Fourth Hotel Now On Hold After Dispute with City of Anaheim

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Disneyland's Fourth Hotel Now On Hold After Dispute with City of Anaheim

Disney puts luxury hotel plan on hold in feud with Anaheim over $267 million in subsidies

By HUGO MARTIN
Los Angeles Times
AUG 15, 2018

Walt Disney Co. has put a hold on plans to build a luxury hotel in the Disneyland Resort’s shopping district, citing a feud with Anaheim officials over tax subsidies that the Burbank media giant was expecting to get from operating the hotel.

The dispute centers on a $267-million tax break that the Anaheim City Council approved in 2016 for a 700-room hotel — the fourth hotel at the Disneyland Resort and the first high-end property built in 20 years.

“You have given us no other choice than to put construction of the hotel on indefinite hold as the resort reevaluates the economic viability of future hotel development in Anaheim,” according to a letter dated Wednesday from David Ontko, chief counsel for Disneyland Resorts, to Anaheim City Atty. Robert Fabela.

Asked to respond to the dispute, Disneyland Resort representatives said the resort’s position is made clear in Ontko’s letter.

“Disneyland’s decision to halt development of their fourth hotel is a devastating blow to Anaheim and a direct result of the city’s increasingly hostile actions towards our local economy,” Todd Ament, president of the Anaheim Chamber of Commerce, said in a statement.

But Anaheim Mayor Tom Tait, who has opposed the subsidy for the hotel project, said Disneyland Resort has the option to build the project without a subsidy from the city.

“It’s a matter of law, and legally the city cannot pay the subsidy because it’s a fundamentally different project,” he said. “If Disney wants to build a luxury hotel they should build it with their own money.”

...

The dispute threatens to delay the scheduled opening of the hotel in 2021.

Disney has yet to break ground on the hotel but has closed several businesses in the shopping district — including the AMC Theatre, Rainforest Cafe, Earl of Sandwich and ESPN Zone — to make way for the hotel.

...

To resolve the feud, the Anaheim City Council could vote to amend its 2016 tax subsidy ordinance or adopt a new tax break to apply to the hotel at the new location.

But it is unclear whether the council would be willing to take such actions because the makeup of the council changed several months after the subsidy vote, with the election of several new members who have been critical of the tax break.

Councilwoman Kris Murray, who supports the subsidy plan, said the council could — if the majority was in agreement — easily end the dispute by amending the previous ordinance to allow the tax break to move ahead on the new hotel location.

I agree with the city of Anaheim on this one. I mean how greedy can Disney get. They want the tax payers to fund the project but then Disney charge top dollar rates and fees and make an exorbitant profit? If I was the Mayor or on the City Council, I would stand my ground and tell them just don't build it then. I am not sure what the hotel occupancy rates are in the area but if they are all staying at high occupancy, Hilton and some of the other brands will gladly build some more hotels in the area and pay their fare share of taxes.